Mortgage rates may have dropped since the pandemic hit, yet high prices and limited inventory remain barriers to buyers’ activity. Therefore, it’s essential for homebuyers to understand which market trends they can influence directly.
Zillow recently conducted an analysis to identify the top 10 real estate markets to watch in 2024, and Buffalo, Cincinnati and Indianapolis made this year’s list due to their relatively affordable properties.
1. Buffalo
Homebuyers and real estate investors alike have taken notice of Buffalo housing market. Renowned for its unpredictable winters and tasty chicken wings, Buffalo could become America’s hottest housing market by 2024 according to Zillow’s research.
Zillow’s analysis considers forecasted home value growth, recent market velocity (how quickly homes go pending), labor market conditions, home construction activity, homeownership rates and projected changes to them all. “Housing markets are most robust when affordable home prices and strong employment provide young hopefuls a fair shot at buying homes and beginning to build equity,” according to a statement issued by Zillow’s data scientist in a news release.
For markets to remain buoyant, they require a steady supply of new homes; either from more homeowners listing existing properties for sale, or through increased construction of brand new residences.
2. Cincinnati
Columbus and Cleveland also made Zillow’s list, because of their affordability in an increasingly costly national housing market. A United Van Lines home shipment study conducted by Zillow discovered that households relocating were drawn toward areas with homes costing an average of $7,500 less than at their previous addresses.
Zillow’s rankings took into account factors like anticipated home value growth, household relocation growth and sales velocity (how long homes stay on the market before going pending). They also considered where baby boomers and millennials are purchasing property.
This year, markets across the South and Mountain West have seen their markets significantly soften, with once-popular locations like Dallas and Denver becoming less desirable due to rising mortgage rates; rising mortgage rates may have priced some buyers out; however, as mortgage rates drop further more prospective homeowners may decide it’s time to purchase.
3. Columbus
Low inventory and record home prices combined with rising mortgage rates has presented many homebuyers with challenges, yet that does not indicate a decrease in real estate market activity in 2024.
Zillow recently conducted an analysis that identified Columbus, Cincinnati and Cleveland as three of the top 10 cities across the U.S. predicted to experience hot housing markets this year. These rustbelt metros will likely see increased activity among homebuyers searching for secure economies at affordable home prices.
Zillow conducted an in-depth evaluation of America’s 50 largest metropolitan areas by taking into account factors like average home value, typical mortgage payment amount and market velocity; as well as growth in owner-occupied households. Furthermore, Zillow evaluated expectations of home value appreciation as well as how quickly homes sell off the market.
4. Indianapolis
Even after an unprecedented year for mortgage rates and prices, homebuyers remain struggling to find affordable properties in certain regions. But according to Zillow’s new report on affordable markets located within Great Lakes, Midwest and South regions continue to thrive and attract homebuyers.
One such area is Indianapolis, which made an impressive 13-spot jump to No. 4. Zillow reports that Indianapolis boasts strong economic fundamentals and fast-moving for-sale housing inventory with plenty of likely buyers.
Zillow notes that its high millennial population and job market activity are key drivers of housing demand in Florida. Plus, with average property prices approximately $75,000 lower than in New York City, Florida could make for an ideal relocation destination.
5. Providence
Providence home prices may be slightly below national averages, yet are still steep enough to put off some potential buyers. And even with an uptick in mortgage applications recently, a lack of affordable options will keep many prospective homebuyers away, according to Axios reports.
Zillow recently conducted an analysis that placed Providence as one of the five hottest real estate markets for 2024 in terms of forecasted home value appreciation, number of days a house stays on the market and job growth relative to housing supply. This ranking took into account forecasted home value appreciation as well as job growth relative to housing supply when compiling this ranking.
Zillow assessed whether communities were drawing buyers from out-of-state, and offering incentives like mortgage buydowns to meet demand for homes.
